So as not to hijack someone's thread

[LdiJ]

What is the name of your state (only U.S. law)? Federal

Ok, Taxing matters posted a link to the entire bill, which I have been reading (and its not easy reading) and I am concerned about something.

I had read several articles that indicated that there were debatable amounts being bandied back and forth for the new standard deductions, and it appeared that the lowest was 12,000 single, 18,000 head of household, and 24,000 MFJ. However, in reading the bill it seems to be reading that the new standard deduction for single is 12,000, MFJ 18,000 and nothing for head of household. If so, this makes this bill even worse for families than I thought. Is anyone else reading it that way or is anyone else reading it differently? Its on page H.R. 1-19 under Part III Tax Benefits for Families and Individuals.

 

[TheGeekess]

Post a link to the file you're looking at, because the copy I'm looking at (http://docs.house.gov/billsthisweek/20171218/CRPT-115HRPT-466.pdf) has HoH on page 4 near the bottom.

 

[LdiJ]

Post a link to the file you're looking at, because the copy I'm looking at (http://docs.house.gov/billsthisweek/20171218/CRPT-115HRPT-466.pdf) has HoH on page 4 near the bottom.

According to Taxing Matters this is what is being sent to the President for Signature;

https://www.congress.gov/115/bills/hr1/BILLS-115hr1enr.pdf

Look at H.R. 1-19 Under Section III

 

[Taxing Matters]

Ok, Taxing matters posted a link to the entire bill, which I have been reading (and its not easy reading) and I am concerned about something.

Not easy reading, especially if you are not a lawyer and don't read tax law every day.

I had read several articles that indicated that there were debatable amounts being bandied back and forth for the new standard deductions, and it appeared that the lowest was 12,000 single, 18,000 head of household, and 24,000 MFJ. However, in reading the bill it seems to be reading that the new standard deduction for single is 12,000, MFJ 18,000 and nothing for head of household. If so, this makes this bill even worse for families than I thought. Is anyone else reading it that way or is anyone else reading it differently? Its on page H.R. 1-19 under Part III Tax Benefits for Families and Individuals.

The bill makes the standard deduction (1) $24,000 for MFJ and surviving spouse, (2) $18,000 for HOH, and (3) $12,000 for everyone else (i.e. single filing status). You see that the HOH is $18,000 in the line that reads:

(A) INCREASE IN STANDARD DEDUCTION.—Paragraph (2) shall be applied—

“(i) by substituting ‘$18,000’ for ‘$4,400’ in
subparagraph (B),​

Edited to add: The bill does not expressly tell you what the MFJ standard deduction is. It didn’t need to since the code already provides the MFJ standard deduction is double what the single standard deduction is, and the bill raised the single standard deduction to $12,000.

 

[adjusterjack]

the bill raised the single standard deduction to $12,000.

OK, here's a question about the single standard deduction (actually applies to all the standard deductions).

On my 2016 taxes the standard deduction was $6300 but since I was born before 1/2/52 (over 65) my standard deduction was $7850.

Will the new standard deductions carry a comparable increase for those over 65 or do they apply to everybody regardless of age?

 

[Taxing Matters]

OK, here's a question about the single standard deduction (actually applies to all the standard deductions).

On my 2016 taxes the standard deduction was $6300 but since I was born before 1/2/52 (over 65) my standard deduction was $7850.

Will the new standard deductions carry a comparable increase for those over 65 or do they apply to everybody regardless of age?

The bill did not change that persons over age 65 and blind persons get a larger standard deduction amount as provided for in IRC § 63(f). However, the bill resets the year for computing inflation increases to 2016. That means that additional amount of standard deduction you will get will start once again at $600 and then that amount will be indexed to inflation, but using a new chained CPI method that will keep the increases smaller than they would using the old method.

 

[LdiJ]

Not easy reading, especially if you are not a lawyer and don't read tax law every day.



The bill makes the standard deduction (1) $24,000 for MFJ and surviving spouse, (2) $18,000 for HOH, and (3) $12,000 for everyone else (i.e. single filing status). You see that the HOH is $18,000 in the line that reads:

(A) INCREASE IN STANDARD DEDUCTION.—Paragraph (2) shall be applied—

“(i) by substituting ‘$18,000’ for ‘$4,400’ in
subparagraph (B),​

Edited to add: The bill does not expressly tell you what the MFJ standard deduction is. It didn’t need to since the code already provides the MFJ standard deduction is double what the single standard deduction is, and the bill raised the single standard deduction to $12,000.

OK, that makes more sense now. I was hoping it was just something that I was missing. I was worried for a moment.

 

[adjusterjack]

The bill did not change that persons over age 65 and blind persons get a larger standard deduction amount as provided for in IRC § 63(f). However, the bill resets the year for computing inflation increases to 2016. That means that additional amount of standard deduction you will get will start once again at $600 and then that amount will be indexed to inflation, but using a new chained CPI method that will keep the increases smaller than they would using the old method.

Every little bit helps.

Another question. Any change in the taxing of social security retirement benefits? One doesn't pay tax on social security benefits unless one's other taxable income reaches a certain point. As that threshold is exceeded the taxable portion of social security benefits increases with the increase in additional income.

Unfortunately, a distribution from a traditional IRA is taxable income so taking a distribution over a certain amount results in tax on a portion of social security benefits.

Any relief for that in the new bill?

 

[LdiJ]

Every little bit helps.

Another question. Any change in the taxing of social security retirement benefits? One doesn't pay tax on social security benefits unless one's other taxable income reaches a certain point. As that threshold is exceeded the taxable portion of social security benefits increases with the increase in additional income.

Unfortunately, a distribution from a traditional IRA is taxable income so taking a distribution over a certain amount results in tax on a portion of social security benefits.

Any relief for that in the new bill?

I have neither seen nor heard anything about that changing. What I have heard is that Trump is talking about going after entitlements next, to help balance the tax cuts this bill is making.

 

[Taxing Matters]

Every little bit helps.

Another question. Any change in the taxing of social security retirement benefits? One doesn't pay tax on social security benefits unless one's other taxable income reaches a certain point. As that threshold is exceeded the taxable portion of social security benefits increases with the increase in additional income.

Unfortunately, a distribution from a traditional IRA is taxable income so taking a distribution over a certain amount results in tax on a portion of social security benefits.

Any relief for that in the new bill?

The provisions of IRC § 86, which is the section that provides for the exclusion of Social Security from income, are not changed by this bill.